$17.4 Bn order backlog for Embraer

Brazil’s Embraer has reported a firm order backlog of US$17.4 billion at the end of the second quarter of 2018, including contracts from its services and support segment.

The company also reported delivery of 28 commercial jets during the quarter, down from the equivalent figure in Q2 2017 of 35. For the first six months of this year it delivered 42 commercial jets, compared to 53 in the first half of last year. Embraer said it remains confident in its 2018 guidance for 85 to 95 total commercial jet deliveries.

Capital expenditure totaled $38.9 million for the first half of the year, less than half the figure for H1 2017. Capex is expected to ramp up during the second half of this year, it said, but could finish the year slightly lower than its outlook of $200 million.

In Q2 2018 Embraer invested $54.9 million in product development, principally related to the development of its E-Jets E2 programme, which continues to progress according to schedule.

The commercial aviation division represented 60.3% of consolidated revenues in the second quarter compared to 52.9% in Q2 last year.

The company added that the first three of its E190-E2 aircraft flying with Norway’s Widerøe have, since late April following delivery, been flying eight cycles for 11 hours per day, accumulating 300 flight hours with 100% schedule reliability.

It also confirmed that an order by Air Costa for 50 E2 jets is “no longer considered in Embraer’s backlog as of the end of 2Q18. This backlog adjustment has no impact on the E2’s production or delivery schedule for 2018 or for 2019.”

Embraer also said its planned transaction with Boeing is expected to close by the end of 2019, and that it was “expected to provide Embraer with significant cash proceeds to reinforce the balance sheet and return meaningful proceeds to its shareholders upon closing.”